Merchants who sell goods on credit over the telephone or the internet (xe2x80x9cremote sale merchantsxe2x80x9d) encounter the difficult problem of credit card fraud. Unlike a merchant selling goods on credit in the physical presence of the purchasers, a remote sale merchant does not have an opportunity to inspect the signature of the purchaser or to compare a photo ID card with the purchaser""s actual appearance.
Typically, a remote sale merchant employs a computer system having terminals or xe2x80x9cvoice response units,xe2x80x9d each of which is connected with a telephone line and is controlled by an operator wearing the commonly familiar telephone headset and receiving telephone calls. Each operator typically answers the telephone and receives purchase request information from the caller that includes the merchandise that the caller wishes to purchase, the person and address to which the merchandise should be delivered, the name of the person making the purchase and a credit or debit card number to which the purchase should be charged. (As used in this application the term xe2x80x9ccard numberxe2x80x9d refers to any charge authorizing number including debit card numbers, credit card numbers, or a charge authorizing number that is not shown on any card.) The operator enters this information into the terminal and presses a keyboard button which causes the computer system to send an authorization query to the card issuing financial institution. The decision to authorize is typically based on whether the number is legitimate, adequate funds are available in the account, and the card holder is current on his or her payments. If the card issuing financial institution declines the charge, the caller is told that the purchase cannot be made. If the financial institution accepts, a charge to the card number account is initiated and the purchase and shipping address information is automatically forwarded to the shipping department which fills the order. Optionally, the financial institution may offer an address verification service (AVS). To utilize this service the remote purchase merchant transmits the shipping address or zip code to the financial institution, which responds with a flag indicating whether or not the address and/or zip code matches the billing address on file.
Another computer system for effecting remote purchases is a computer system for enabling parties to purchase items over the internet or from a computer connected by modem to the computer system. In such a computer system, the party making a purchase request enters his or her credit card number and a descriptor or descriptors of the merchandise to be purchased into a remote terminal that is connected by way of the internet or a telephone line to the computer system. Again, the computer system generates an authorization query to the card issuing financial institution and contacts the shipping department to fill the order if the purchase is authorized.
Unfortunately, there is sometimes a considerable time interval between the time a credit card is stolen and the time when the theft of the card is reported to the card issuing financial institution. Moreover, the notation and illicit use of a credit card number by a dishonest store clerk or other person able to observe the number is likely to be completely undetected until the number is used fraudulently and the card holder receives his or her statement.
When a cardholder does receive a statement bearing fraudulent charges, he or she is likely to quickly disavow the purchases. In these cases the card issuing financial institution typically will ask the merchant to corroborate the purchase with a copy of a signed credit card receipt. For the case of a remote purchase, the merchant will not be able to produce a signed receipt. In this situation the merchant is forced to accept a xe2x80x9ccharge backxe2x80x9d and to return the funds to the card issuing institution.
Credit card fraud varies from casual fraud by the occasionally dishonest and adventurous to sophisticated operations that attempt to purchase a large quantity of a particular item and to profitably reintroduce it into the stream of commerce. As systems for selling items over the internet and telephone lines become increasingly automatic, fraud systems also become more automatic. For example, it has been known for thieves to use a computer to invent credit card numbers and submit a large number of purchase requests, knowing that a portion of the invented card numbers will be for issued credit cards and hoping that some of the purchase requests will be accepted.
Despite the occurrence of fraud, the convenience and speed of using credit cards to make remote purchases is causing a continued expansion in catalog sales, advertised telephone sales and sales over the internet.
In a first separate aspect, the present invention is a computer system for processing and selectively blocking a current remote purchase request based on information gained from at least a previous remote purchase request. The system includes a data input subsystem, connected to a data line, capable of automatically receiving an origin, and of further receiving a card number and merchandise descriptor to form, in total, a purchase request information set. Also, a memory subsystem is adapted to store the purchase request information set and a logic subsystem is adapted to effect a comparison of the purchase request information set of the current remote purchase request with the purchase request information set of at least one of the previous remote purchase requests. Further, the logic subsystem is adapted to cause the current remote purchase request to be blocked if the comparison meets any one of a predetermined set of criteria wherein at least one criterion includes a condition that the purchase request origin of the current purchase match the purchase request origin of the previous purchase request.
In a second separate aspect, the present invention is a method for selectively blocking a second remote purchase request based on information gained from at least a first remote purchase request. The method includes the act of receiving and storing a first purchase request information set including an origin, a credit card number and an item and also receiving and storing a second remote purchase request information set including an origin, a credit card number and an item. The second remote purchase request information set with the first remote purchase request information set and blocking the second remote purchase request if the comparison meets any one of a predetermined set of criteria wherein at least one criterion includes a condition that the purchase request origin of the first purchase request match the purchase request origin of the second purchase request.
In a third separate aspect, the present invention is a method for selectively blocking a remote purchase request based on information gained from previous remote purchase requests. The method starts with the act of providing a memory subsystem and receiving and storing, in the memory subsystem, information from purchase request information sets including, for each purchase request information set, an origin, a card number and an item. In addition a current remote purchase request information set including an origin, a credit card number and an item is received and stored. Then the current remote purchase request information set is compared with the purchase request information sets stored in the memory subsystem and the current remote purchase request is blocked if the comparison meets any one of a predetermined set of criteria wherein at least one criterion includes a condition that the purchase request origin of the current purchase request match a purchase request origin of a purchase request information set stored in the memory subsystem, for which the card number is different.